DiamondRock reports Q2 adjusted FFO 35c, consensus 33c

Reports Q2 revenue $305.7M, consensus $303.54M. “RevPAR in Q2 was in line with our expectations, with demand down modestly and rates up compared to the same time last year. Out-of-room spend accelerated from levels experienced in the first quarter, and that trend has continued into Q3. Excluding a larger than anticipated property tax increase in Chicago, we were able to limit expense growth to just 0.7%. We are beginning to see signs of a stabilization in travel patterns in our higher end portfolio and expect out-of-room revenues to remain a bright spot in the second half of the year. Policy and macroeconomic uncertainty remain, although to a lesser extent than three months ago. We are comfortable raising the midpoint of our 2025 Adjusted EBITDA and FFO per share guidance. In July, we successfully refinanced and extended the maturities under our senior unsecured credit facility, increasing its size from $1.2B to $1.5B with pricing unchanged. Following the prepayment of our remaining mortgage loan in early September, we will have no hotels encumbered by debt, all our debt will be fully prepayable at any time without cost, and we will have no debt maturities until 2028. We continued to take advantage of the disconnect in our share price and repurchased an additional $12.6 million of common shares in Q2, or $27.3M year to date. With an implied capitalization rate of 9.7% based on consensus estimates, we continue to view share repurchases as one of our best uses of capital.”